CeMAT Insider

Taking a federal approach to getting the supply chain right

Posted by CeMAT Team on 12-Jul-2016 12:19:46

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“We appreciate the value of infrastructure to improve the efficiency and safety of our supply chains” stated Michael Kilgariff, Managing Director of the Australian Logistics Council (ALC) at CeMAT Australia 2016.

ALC represents some of Australia’s largest freight companies, and remained quite vocal in the federal election to prioritise infrastructure reform and encourage a national discussion on the importance of a long term strategy.

Getting Australia’s supply chain right will drive productivity throughout the rest of the economy. Increasing logitics efficiencies of just 1% would deliver a $2billion benefit to the economy. 

But according to Michael, this isn’t a matter that should be taken lightly. To save $2billion to the national economy, we need:

  • The right structure
  • The right planning
  • The right rail
  • The right road pricing
  • The right road safety
  • And the right technology

Not so simple, is it?

Michael states that to achieve this we need to focus on the growth in containerised freight because the way we move goods around states is paramount to productivity.

Linking ports to intermodal terminals will help drive freight onto rail, and if we have the right rail network, this will improve efficiencies from port to rail, from rail to road.

When it comes to road freight, major freight facilities should remain curfew-free. For example, there are already murmurs that the new airport at Badgery’s Creek will have a curfew; defeating the purpose of the facility in the first place.

Getting the structure right is the most important issue that the government needs to be working on. This is why Michael would like to see a specialised freight division introduced within in infrastructure and transport departments of the Federal Government.

According to Michael, “8.6% of the economy is not getting the attention is deserves”, and we need to start planning better for our future.

The national freight and supply chain strategy came out of Infrastructure Australia’s 15-year plan and was designed to address critical infrastructure gaps, and Michael states the next infrastructure minister has his work ahead of him.

“We’re yet to have an infrastructure minister appointed, but his main goal should be to address the 15 year infrastructure plan via a holistic logistics strategy.

The strategy needs to be both ambitious and achievable, if that’s not an oxymoron.”

According Michael, Australia needs a strategy to set out who’s responsible for which particular pieces of infrastructure and regulatory reform.

“We need to get out of the political cycle where successive governments abandon everything from the previous government. The industry needs certainty.”

Michael would like to see a strategy that maps out the nationally significant logistics networks, while also evaluating the significance of supply chains and recommend reforms. It also needs to take a multi-modal approach and recommend a series of reforms that state and federal departments can begin work on.

“We need a more integrated approach to freight and urban planning, including logistics facilities and urban encroachment.”

But it isn’t all doom and gloom coming from the head of ALC, as he states there are promising technologies that can also spur on productivity in the sector.

Michael states that maintaining on open and visible supply chain can help drive safety in the heavy vehicle industry, and the effect of this should not be undersestimated.

Michael closed his discussion by returning to the importance of focusing on freight in the long term, stating that it is literally the coffee we have for breakfast and the dinner we cooked last night that’s at stake.

“Without a long term place for Australia’s freight future we will miss an opportunity to build a stronger economy”.

Topics: Supply Chain Management, Logistics